Microsoft sues Google over competitive hire

Google has hired a man with plans and fancy pants to match, and Microsoft isn' …

Microsoft is suing Google and Kai-Fu Lee for breach of contract. Kai-Fu Lee has been hired by Google to lead research and development at a facility in China. The problem? Lee last worked for—you guessed it—Microsoft, as as VP of Microsoft's Interactive Services Division. As you might expect, Lee signed a contract forbidding employment with a direct competitor back in 2000, when he joined the company. Microsoft has now asked the state of Washington to get involved.

"Accepting such a position with a direct Microsoft competitor like Google violates the narrow non-competition promise Lee made when he was hired as an executive," the suit says. "Google is fully aware of Lee's promises to Microsoft, but has chosen to ignore them, and has encouraged Lee to violate them."

While suing someone over a non-compete is nothing new, Microsoft's suit also point the finger at Google in an unkind way. The stakes are higher than you might think. Lee oversaw the development of the new MSN Search, as well as Microsoft's desktop search product. He's a pivotal player in the game, and per his contract, he should not work in direct competition for at least a year, according to Microsoft. Tom Burt, a lawyer for Microsoft, told the Wall Street Journal that Google was basically saying "In your face" to Microsoft, because they clearly know that they shouldn't hire Lee. In fact, as News.com notes, Google uncharacteristically celebrated Lee's hire in a news release.

Here in the HQ there's been some speculation about the enforceability of the contract. At the heart of the matter is the legal status of Google's Chinese R&D center, which is opening in a few short months. China typically requires companies to be Chinese-owned, which means that this Google unit could be a joint-venture between Google and a Chinese partner, no matter how symbolic that partnership may in fact be. Could this insulate Google? Perhaps, but what about not being evil?

Microsoft is seeking monetary damages, a guarantee that Lee will not share secrets, and an injunction forcing Google to uphold the 1-year non-compete.

Ken Fisher / Ken is the founder & Editor-in-Chief of Ars Technica. A veteran of the IT industry and a scholar of antiquity, Ken studies the emergence of intellectual property regimes and their effects on culture and innovation.